The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

The Louisville Cardinals have made two consecutive Final Fours, and a No. 4 seed this year means a third straight trip to the NCAA Tournament's semi-final round may be in the cards. It would be a fitting outcome because this year also marks the third straight year that Louisville reigns supreme off the court: Now worth $39.5 million, the Cardinals are once again college basketball's most valuable team.

Louisville has been among college basketball's three most valuable teams ever since we started ranking the teams in 2008, but that financial success turned to dominance when Louisville began playing home games in the KFC Yum! Center. The new waterfront arena, which opened in 2010, has the third-highest capacity among college basketball arenas. We didn't rank the most valuable college teams in 2011, the first year that the KFC Yum! Center's impact would have been recorded, but by 2012 the Cardinals were worth $36.1 million, up nearly 40% from two years earlier.

The new home court allows Louisville to host huge gameday crowds, and the team has ranked third in average home game attendance in every season since its opening (Kentucky and Syracuse have ranked first and second, respectively). Last year the Cardinals collected $12 million from ticket sales alone - Xavier, at No. 17 on our list, makes that much in total annual revenue. Alumni have also been pleased, as the school counts a massive $29 million in contributions, nearly 75% of which it attributes to the basketball team. Add on some $6 million in NCAA and conference distributions and another million in parking and concession sales, and you've got the sport's best recipe for success.

In second place for the second straight year is Kansas. The Jayhawks, unlike Louisville, have not always been a top financial power. In fact, in 2008 Kansas ranked eighth with a value of $16 million, which was below that year's average value for a top-20 team. But Kansas is now worth $33 million, thanks largely to $13 million in ticket sales and, like Louisville, massive contribution revenue: The Kansas athletic department collected $33 million in such donations. And Bill Self's Jayhawks have been stellar on the court, too, generating more money for their conference from NCAA Tournament play than any other team in the nation.

Yet while Kansas has climbed toward the top of the list, North Carolina has been moving in the other direction. The Tar Heels were the sport's most valuable team from 2008 through 2010, but they've since given up ground to other top teams. Thanks to hosting two fewer home games, not playing the Carrier Classic and changes associated with the ACC's new TV deal, UNC's revenue fell by some $4.4 million last year, an 18% drop, and team value dipped 22% to $25.7 million, ranking the team fourth. Taking UNC's No. 3 spot this year is Kentucky.

Unlike our professional sports valuations, our college basketball values don't represent what a team would sell for on the open market; as college teams, they obviously cannot be bought or sold. Instead, we use a weighted methodology to determine how much value the top college basketball teams generate for their athletic departments, universities and fellow conference members. Athletic value is team profit directed toward other sports programs, university value is team income that goes back toward academic programming and conference value measures the money generated for fellow conference members from NCAA Tournament play.

Financial details are from the 2012-13 season, the most recent year for which data is available. We utilize the Department of Education's financial database and standardize revenue and expense streams to account for differences in accounting practices from school to school.

The average team on our list is now worth $20.2 million, down just slightly from last year's $20.4 million average value. The two biggest changes in value belong to No. 12 NC State, up 30% to $17 million, and No. 6 Arizona, up 29% to $25.2 million. Arizona's growth actually represents a rebound after dropping from a 2008 value of $22.7 million:

Two teams fell off the list this year. The first, UCLA, had been a mainstay, but the team's financial performance has suffered in recent years and last season the Bruins reported financial losses for the first time in over a decade. The other drop-off was Kansas State, which was ranked No. 19 last year. The two new teams to the list are Michigan (No. 14, $14.2 million) and Arkansas (No. 20, $11 million). The Wolverines saw team revenue increase by some $5 million last year, the result of increased ticket sales, contributions and conference distributions; the Razorbacks make a return to our list for the first time since 2008.